2020's mergers and acquisitions in mortgage

As we wrap up a chaotic year, National Mortgage News looks back at some notable merger and acquisition activity that occurred over the past 12 months. However, this list does not include transactions with special-acquisition purpose companies that are being used to launch public stock offerings by a number of nonbank lenders.

Intercontinental Exchange buys Ellie Mae for $11B

Intercontinental Exchange, which also owns MERS and Simplifile acquired Ellie Mae from private equity firm Thoma Bravo in a deal that valued the mortgage-lending platform at about $11 billion.

Thoma Bravo took Ellie Mae private in a $3.7B deal in February 2019.

"We have a business that is part of nearly every U.S. mortgage closing process, collecting, marshaling and storing critical data," ICE CEO Jeff Sprecher said in July, prior to the deal. "U.S. mortgage back-office workflow is ripe for automation and greater efficiency."

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Black Knight, Cannae and THL team up to get Optimal Blue for $1.8B

Black Knight partnered with investor Thomas H. Lee Partners and Cannae Holdings to purchase product and pricing engine provider Optimal Blue from GTCR.

As part of the transaction, the buyers placed Optimal Blue into a new entity with Compass Analytics. Black Knight owns 60% of the new venture. Cannae and THL own 20% each. Black Knight planned to pay $1.8 billion of cash in the deal, which closed in the third quarter.

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First American snags Docutech for $350 million

First American Financial, a title insurance underwriter and settlement services provider, is acquiring mortgage document firm Docutech for $350 million in cash.

"The acquisition of Docutech reflects our steadfast commitment to invest in and grow our core business," First American CEO Dennis Gilmore said in a press release. "Moreover, it demonstrates our dedication to improving the home-buying experience for consumers and driving the digital transformation of the real estate settlement process."

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SitusAMC picks up Cohen Financial from Truist

Truist Financial sold its Cohen Financial platform to SitusAMC Holdings, shedding a legacy SunTrust Banks platform that managed $34 billion in CRE assets. It did not disclose the price.

Tim Mazzetti, SitusAMC's head of U.S. servicing and asset management, and Dean Wheeler, the company's head of client service delivery, worked at Cohen between 2006 and 2019, leading the buildout of the loan servicing and asset management platform for structured-finance and CRE/multifamily loan assets held for institutional clients.

"We're very excited to have the opportunity to buy our platform back, which we spent, you know, 12-plus years building," Mazzetti said in an interview.

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Covius purchases Clayton Services from Radian

Radian Group sold Clayton Services, a due diligence company it acquired in the 2014 purchase of Clayton Holdings, to Covius Holdings. Terms of the deal were not disclosed.

Back in May 2014, Radian — a holding company whose main business is private mortgage insurance — paid $305 million for Clayton Holdings, expecting the imminent return of the private-label mortgage securitization business and the need for outsourced services such as loan reviews and due diligence for those deals.

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Brown & Brown strikes a deal to buy Loan Protector

Brown & Brown plans to buy the assets of a lender-placed insurance and insurance tracking firm that does business as Loan Protector.

Both companies are well-known among mortgage servicers as providers of lender-placed insurance. Loan Protector has been in the business for more than 40 years and Dennis Swit has led the company, co-owned with Dawn Swit, for the past 25 years.

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MVB Financial, Intercoastal team up in a joint venture

The $2 billion-asset MVB Financial said that its mortgage unit will merge into a new limited liability corporation and operate as Intercoastal Mortgage, the same name as its Fairfax, Va.-based partner.

As part of the partnership, MVB will contribute substantially to all of its mortgage unit's assets in exchange for a 47% stake in the joint venture. MVB will also receive $7.5 million in preferred units.

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CrossCountry buys First Choice Loan Services from Berkshire Hills Bancorp

CrossCountry Mortgage has acquired the assets of First Choice Loan Services, a former affiliate of Berkshire Hills Bancorp that has marketed mortgages to Costco members.

"The addition of this group is a terrific fit for us," said Ron Leonhardt, CEO of CrossCountry Mortgage. "We are pleased that they chose to join us. It enhances both our strategic growth in several regions as well as our consumer-direct component. Our team committed to, and achieved, a smooth transition for the loan originators."

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Freedom Mortgage finally completes RoundPoint transaction

After announcing the acquisition of RoundPoint Mortgage Servicing in May 2019, the merger with Freedom Mortgage has finally closed.

Through the deal, Freedom's mortgage servicing rights portfolio grows about 25% to an estimated $310 billion in unpaid principal balance by adding around $75 billion in servicing and subservicing UPB from RoundPoint.

Terms of the transaction were not disclosed and neither company responded to a request for details on the merger's delay.

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Black Knight purchases DocVerify

DocVerify's e-notary capabilities aim to ensure streamlined and verified transference of sensitive information. The fintech's products have already been integrated with Black Knight's digital closing platform, Expedite Close. Terms of the acquisition were not disclosed.

"Black Knight and DocVerify are an exceptional strategic fit, given how our solutions and platforms complement one another," said Black Knight CEO Anthony Jabbour. "Digital documents are becoming the norm for conducting business in virtually all industries."

(Read full story here.)

Orogen Group takes majority stake in Westcor

Orogen Group, an investment firm controlled by former Citigroup CEO Vikram Pandit, acquired a majority ownership stake in Westcor Land Title Insurance Co., the nation's fifth largest underwriter.

The terms of the deal were not disclosed.

"Most aspects of the financial services landscape are being modernized, and we believe Westcor is at the forefront of bringing new and innovative approaches to the title insurance industry," said Pandit, now Orogen's chairman and CEO.

(Read full story here.)